Jonas recently purchased a one-year membership at Golds Gym. He can add a second year to the

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Jonas recently purchased a one-year membership at Gold’s Gym. He can add a second year to the membership now for $1215, or wait 11 months and pay the regular single- year price of $1280. Which is the better economic alternative if money is worth 8.5%? At what discount rate would the alternatives be equivalent?
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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